AIB has reported pre-tax profits of €2.6 billion for last year, an increase of more than 50%, lifted by more than €500m from property sell-offs and the sale of Ark Life. The results were better than expected.
Adjusted earnings per share rose by 25% to 182.8 and a final dividend of 46.5 cent will be paid, giving a 10% higher total dividend of 71.8 cent. Total income grew by 18% to €4.3 billion, while total loans to customers were up 26%.
Competition and the rapid growth in lending helped reduce net interest margins from 2.38% to 2.26%. Total costs rose by 14%. AIB is targeting low double-digit percentage earnings growth in 2007.
A breakdown showed that profits at AIB's retail banking division in the Republic rose by 24% to €966m, with lending up 32% and deposits to customers 20% higher. The profits include €11m from its 25% stake in the joint venture with Hibernian, which took over Ark Life.
In capital markets, profits jumped by 46% to €589m, with profits in the corporate banking division 42% ahead, while investment banking profits surged 62%. But global treasury profits fell 2%, blamed on higher interest rates and inflationary pressures.
UK profits rose by 17% to €379m, with British profits up 23% to €209m and First Trust in Northern Ireland 11% ahead at €170m.
In Poland, profits climbed 56% to €207m, helped by a pick-up in lending, which grew 23%. Profits from group activities were €474m, up from €70m in 2005. This included €256m from the sale of AIB's Bankcentre building and €73m from the sale of 11 branches in the Republic. But profits from its stake in M&T dropped from €148m to €141m, mainly due to accounting changes.
Shares in AIB closed up 20 cent at €21.87 in Dublin this evening.
